Credit Cards Plus

Using credit cards to pay off bills is a growing trend for credit card users.  This can make a lot of sense, and it is becoming far more worthwhile.  However credit cards being used for bill payments can be an early warning sign of future problems.

There are a number of reasons to use credit cards for paying off bills.  Credit cards can be very convenient for making payments, the grace period can be used to smooth out temporary financial shortages and they can take advantage of cash back and other rewards.

The convenience of using debit cards can be very useful.  It is possible to use credit cards to pay by mail, over the phone or on the internet.  Few utilities allow for credit cards to be used in the mail back form for credit cards.  However credit card companies have found it very useful to use it by phone or over the internet.

Utility companies will operate telephone centers for client enquiries.  In recent years they have started to allow these lines to take payments over the phone by using credit cards.

Similarly many utility companies have the ability to use the website to take credit card payments over the internet.  This can be accompanied by email bill reminders which will link to a quick payment page that can match the account details and the amount to be paid.

Another reason why credit cards can be used to the card holder’s advantage is that here is an interest free grace period.  This means that if a bill arrives and its due payment date is somewhat near the payment date then it will be possible to pay this after the date that the salary is paid.  Unlike an overdraft there will not be interest for this period.  However care should be taken not to carry the balance to when it will start to attract interest.

Another reason to use credit cards for bill payments is that it can be used for both cash back and other rewards.  This will mean that the bill payments can go towards the rewards as well as other types of spending.

The rewards are offered because there is a merchant fee in return for the credit card processor processing the payment.  For this reason many utilities used to charge surcharges for using a credit card.  This is becoming rarer as utilities appreciate the convenience of credit cards for the ease of payments.